This invention pertains to data processing techniques useful in Banks. More particularly this invention pertains to a data processing technique for determining the number of different Relationships that a customer has with the Bank, scoring the Relationships and awarding Incentive Rewards based on the Relationship score. As used herein the term xe2x80x9cBankxe2x80x9d is intended to mean all types of financial service institutions, including banks, savings and loan associations, credit unions and the like, which offer a variety of financial and investment services to customers; the term xe2x80x9cRelationshipxe2x80x9d is intended to mean each type of financial transaction, account or interaction which the customer may establish with the Bank, such as a checking account, savings account, consumer loan, credit card, mortgage, investment, certificate of deposit, insurance policy, new customer referral or the like; and the term xe2x80x9cIncentive Rewardxe2x80x9d is intended to mean some type of consideration or recognition established and given by the Bank to the customer in recognition of the number and characteristics of the customer""s Relationships, such as an increased interest rate on deposit accounts, a reduced interest rates on loan accounts, reduced Banking service fees or the like.
There is a recognized need in the financial services industry to attract and retain loyal customers. A loyal customer is one who establishes all or a significant number of his Relationships with a single Bank and does so over an extended period of time. This need is particularly important to Banks in small and medium sized communities where regionally and nationally marketed financial services have attracted customers away from the local institutions. This need is also important to Banks in highly competitive markets where customers are offered a wide variety of investment and Relationship options, some of which may individually be very enticing to existing customers of other Banks.
Incentive programs for rewarding repeat or ongoing customers have become increasingly common in a variety of industries. Well known examples of the use of incentives to attract and reward repeated customer patronage are airline frequent flyer programs. In airline frequent flyer programs the customer is awarded points, often expressed in terms of xe2x80x9cmiles traveledxe2x80x9d for each use of a particular airline or its affiliates. Additional points or xe2x80x9cmilesxe2x80x9d are awarded for use of ancillary services such car and hotel room rentals. Other examples of customer incentive programs include the trading stamp programs once popular in the grocery retail trade.
The assignee of the present invention has developed a Bank customer incentive program called the xe2x80x9cLoyalty Banking(copyright) Program.xe2x80x9d Under the Loyalty Banking Program a Bank rewards customers who have Relationships with the Bank and who maintain those Relationships for extended periods of time. A portion or all of the Bank""s customers may be enrolled or participating in the program. Other customers may not be enrolled in the program. A score card is manually maintained for each customer enrolled in the Loyalty Banking Program. Points are manually calculated based on the information manually entered on the score card, and Incentive Rewards are manually awarded on a periodic basis for the number of Relationships maintained by the customer at the Bank. The point awards may be increased in relation to the length of time the customer maintains the Relationships at the Bank. Based on the points accumulated by the customer as represented by the score on the score card, the customer periodically receives Incentive Rewards.
The implementation of a customer incentive program for Bank customers has complexities not found in customer incentive plans in other industries. The Relationships between the Bank and any customer may be quite numerous and complex, involving a number of different kinds of accounts and interactions. Most other incentive programs require tracking of only one customer factor such as miles travelled in a frequent flyer program or the total dollar volume of purchases in a grocery store trading stamp program.
Implementation of the assignee""s manual Loyalty Banking Program is difficult, time consuming and labor intensive. There is always the increased risk of incorrect calculations resulting from human computations. Maintaining a manual Relationship score card on each Bank customer duplicates much of the data available in the computer data bases maintained by most modern Banks.
There can exist a great deal of variation among Banks in the types of financial services offered and emphasized. In particular, different Banks may wish to establish different scoring systems for the various types of Relationships, depending on which Relationships they find to be most profitable. Further, each Bank may wish to establish a different award structure of incentives, depending upon that Bank""s perception of the benefits of the program in relation to the costs of the incentives and to the needs of its particular community.
Furthermore, for an incentive program to be fully effective as a tool for attracting and retaining long-term customers, it is desirable for the Bank""s management to be able to monitor the Relationships between the Bank and the customers as individuals and in groups. The Bank may thus be able to identify significant opportunities for marketing its financial services by evaluating the Relationships and their appeal to customers.
It is against this background that the present invention has evolved.
A significant aspect of this invention is a Relationship scoring and Incentive Reward awarding process useful with a Bank customer incentive program to reduce the labor required by a manual Bank customer incentive program. In accordance with this aspect of the invention the Relationship scoring and Reward awarding process assembles data representing the Relationships between the Bank and its customers and automatically determines the Relationship score for each customer from the assembled data. The Relationship score may be based on the number, type and duration of the Relationships. Also in accordance with this aspect of the invention Incentive Rewards are awarded to each customer based on the automatically determined Relationship score. Further in accordance with this aspect of the invention the Relationship score to be awarded for the type and duration of each Relationship may be established or changed to meet the requirements of the Bank.
Another significant aspect of this invention is a Relationship scoring and Incentive Reward awarding process that automatically obtains information about customers"" Relationships with the Bank directly from the Bank""s computer data base, or customer information file, that is maintained by the Bank for its day-to-day data processing operations. By obtaining the data directly from the customer information file, the labor required compared to a manual Bank customer incentive program is further reduced and human errors in transferring data are virtually eliminated. In accordance with this aspect of the invention information representing customer Relationship is automatically extracted from the customer information file. The extracted information is automatically used by the Relationship scoring and Incentive Reward awarding process in determining the Relationship score of each customer.
Still another significant aspect of this invention is a Relationship scoring and Incentive Reward awarding process that automatically determines a customer""s entitlement to the Incentive Rewards. In accordance with this aspect of the invention a vesting relationship or percentage is automatically determined from the Relationship score and the Incentive Rewards are awarded accordingly. Also in accordance with this aspect of the invention the Incentive Rewards may be automatically awarded to the customer by adjusting information in the customer information file. Examples of information that may be adjusted to award Incentive Rewards are loan and deposit account interest rates and bank service fees. Further in accordance with this aspect of the invention, the relationship between Relationship score and the vesting of Incentive Rewards may be established or changed to meet the requirements of the Bank.
A further significant aspect of this invention is a Relationship scoring and Incentive Reward awarding process that prepares written reports to convey marketing information to the Bank""s management. In accordance with this aspect of the invention the information concerning the Relationships between the Bank and its customers is organized and written reports presenting the information regarding the nature of the process itself is presented in a format specified by the Bank""s management.